Anaheim Hotelier: Don’t Take My ‘Family Legacy’ for Streetcar

ByADAM ELMAHREK |February 28, 2014

In 1962, Carmen E. Scalzo, a Sicilian immigrant and entrepreneur, built a hotel in south Anaheim across the street from Disneyland, and in the ensuing decades his family's business thrived due largely to its proximity to the world's most famous theme park.

Fast forward more than 50 years and Scalzo’s grandson, Paul Durand, says his "family legacy" is under attack by the push for a $319-million streetcar project conceived primarily for the benefit of Disneyland.

The Park Vue Inn, along with an IHOP and Cold Stone Creamery also owned by Durand’s family, could be subject to an eminent domain action the city claims is needed for the streetcar system to become reality. City officials have been less than forthcoming regarding the specifics of their plans, Durand said.

“They’re being secretive and deliberate, and it’s harming me,” Durand said. “If it’s going to come through my property, tell me, because I’m trying to run a business here.”

He added that the eminent domain threat is also affecting his plans for another hotel project on the property.

Anaheim Public Works Director Natalie Meeks said the project isn’t far enough along to give Durand more definitive answers. An environmental impact report, scheduled to be released in December, is supposed to identify the preferred route and therefore clarify which properties would be taken, she said.

The proposed 3.2-mile streetcar system would connect a transit depot currently under construction with Disneyland and other key destinations in the city, including the convention center, the Platinum Triangle development and the GardenWalk outdoor mall.

A Controversial Project

Supporters have said the streetcar will increase connectivity and spur economic investment. Critics, meanwhile, say that the project will benefit only a select few in the business community and that an enhanced bus alternative would cost $260 million less.

Orange County Transportation Authority documents show that Anaheim's project topped a cost comparison involving 11 other streetcar systems across the country. A major factor driving up the cost is the right-of-way acquisition budget, which is more than $30 million.

In order to finance the streetcar, city officials are hoping to tap federal grant funds and revenue from Measure M2, the countywide half-cent sales tax that finances transportation improvements.

But the project must ultimately be approved by the Transportation Authority's board of directors, and some prominent board members don't like the idea of the city spending millions in taxpayer dollars to take property away from a family fighting for its business.

That issue first arose last year when blogger and activist Cynthia Ward pointed out in public comments to the Transportation Authority board that something big was in the streetcar’s way and that board needed to ask Anaheim officials about it.

Vocal Board Members

When Meeks acknowledged to the board that an IHOP and hotel would likely be taken, “that seemed to be a real lead balloon in the room,” said county Supervisor and Transportation Authority Chairman Shawn Nelson.

“If Anaheim is proceeding with some belief that [OCTA] thinks that’s a good idea, that would be making it up,” said Nelson.

John Moorlach, also a Transportation Authority board member and county supervisor, said city officials should tell Durand whether his property is going to be taken.

“I think that Anaheim has kept it quiet. … That’s a disservice to the community," Moorlach said. "And I think it’s a disservice to landowners."

Irvine Councilman and board Director Jeffrey Lalloway, a vocal critic of the streetcar, said there should be a strong bias among government officials against eminent domain.

“There are certain times when eminent domain needs to be used when constructing pure public works projects, like roads or bridges or schools or things like that, but it should be used very judiciously and only when absolutely necessary,” Lalloway said.

Other board members, such as San Clemente Councilwoman Lori Donchak,agreed with Lalloway that eminent domain should be a last resort, but they are more willing to defer to Anaheim officials’ judgment of their community needs.

“I put a lot of weight on what the local municipality thinks is a good idea,” Donchak said, “because local knowledge is pretty important in programs like this.”

But Ward and others who have investigated the proposal said that in this case the eminent domain action is not necessary and being done simply because Disney wants a drop-off location for visitors that is closer to the main gate than if the streetcar was rerouted to avoid the hotel complex.

Durand makes similar arguments. In addition to violating state environmental law, he said, a city document shows that the city would be swapping his hotel land with Disney property by moving a Disney transit hub to his hotel site.

That would free Disney land for other uses, and according to Durand’s attorney, would be a violation of the city’s Measure P, which makes it illegal to take private property for the benefit of another private property owner.

Mayor Tom Tait, who agreed that city officials should be upfront with Durand about the fate of his family’s properties, said he doesn’t believe there is a violation of Measure P, because while the project is certainly good for Disneyland, the resort isn’t the “primary” beneficiary.

“It’s too broad for the premise,” Tait said.

A Third Gate in the Offing

The first public acknowledgment of how important the project is to Disneyland came in 2013 when Anaheim Councilwoman Kris Murray told the Transportation Authority's board that the project would help take cars off the road and therefore allow Disney to expand the resort and open a third gate.

Meeks largely confirmed that the project’s most important goal is to deliver tourists to Disneyland’s main gate when she told the board about the expensive property acquisition. Other routes didn’t make sense, she said, because if riders aren’t dropped off at the gate, studies show that ridership would plummet.

The city’s cost estimate for acquiring Durand’s and adjacent properties is likely far too low, Durand said. He argued that the city must compensate for not only the value of the property but also for the success of the businesses — a significant amount given that the IHOP and Coldstone locations are among the best performing in the country and that the hotel's average occupancy rate is more than 95 percent.

In total, the businesses employ more than 200 people and provide about $750,000 in annual tax revenue to the city, he said.

Durand is quick to acknowledge the irony that Disney is the reason for both his family’s business success and its potential downfall.

“Without [Disney], I wouldn’t have a business. That’s what makes this so hard,” he said.

The Transportation Authority board has asked Anaheim officials to study ways of reducing the project’s total cost. Nelson said he is confident that Anaheim can find other route options that won’t require pricey eminent domain actions.

But according to Meeks, alternatives studied so far don’t work very well. One problem is the routes — and therefore the tracks — would be longer and more expensive, and the increased travel time would reduce ridership.

Meeks said that the city is following all state and local laws and regulations and would soon be sending a response to the letter from Durand’s attorney.

Anaheim council members Lucille Kring, Jordan Brandman, Gail Eastman and Kris Murray did not return phone calls seeking comment for this article.

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